Banca IFIS collapse - what's the next move?

Banca IFIS has lost over 60% of its value just over a one-year period!

The stock was trading at around 48 euro per share and is now hovering around the 17-euro area.

What were the reasons for this huge decline?

This downtrend mainly happened because of the current tensions which are surrounding Italian banks, together with the fact that the bank has in itself exposure to Italian government bonds which are also under attack by speculators.

During a recent conference call with the shareholders, CEO Giovanni Bossi has re-assured investors saying that:
A) The exposure to Italian government debt is very limited
B) Capital is sufficient to sustain the business plan
C) Positive indications on the non-performing loans division which could show better numbers than what was planned

Attached we can see the latest financial results of the bank. The % increase in revenues and profits over the last 5 years is c. 18%, which when compared to the PE of 6, one can easily deduce that the share is very undervalued.

I remain of the idea that it is convenient to be shareholders of this bank due to its solid fundamentals and the latest price decline is a good entry opportunity.


Article written by Luca Discacciati

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